July 31 (Reuters) - Shares in waste management provider Avalon Holdings Corp posted a second day of losses on Tuesday, erasing most of a 500 percent gain in the five previous trading sessions, as it became the latest of three companies to register volatile swings around the time ownership disclosures were filed by the same investor.
Avalon stock soared to an intra-day high of $20.20 on Monday before closing sharply lower, after rallying from $3.35 at the close last Tuesday. Avalon, which also owns golf courses, fell 39.4 percent to $3.67 on Tuesday.
The companies, Avalon, Mer Telemanagement Solutions and New Concept Energy have all seen their shares soar and sink in a few days during which a Bahamas-based broker dealer MintBroker International disclosed holdings in each of the companies.
On Tuesday Bloomberg published a story about the three companies and their common shareholder MintBroker. According to the report, Guy Gentile, a trader who founded MintBroker in 2011, started cooperating with the FBI in 2012 after the FBI said he orchestrated two "pump-and-dump" schemes that caused investors to lose $17 mln [bloom.bg/2LEEfGx]
Adam Ford, a lawyer at Ford O' Brien LLP in New York, confirmed his client had cooperated with the FBI but said he has always denied he committed any crime.
Starting on July 24 trading in the stock has surged dramatically. After closing at $2.20 on July 23 it climbed for four days before it started its descent after hitting record high of $20.20 on Monday July 30.
About 3.9 million Avalon shares changed hands on Tuesday, well above its daily average of roughly 3,000 before the recent activity spike, according to Reuters data
MintBroker on Fri July 27 filed a Form 3 with the Securities and Exchange Commission disclosing ownership of 1.9 mln shares in Avalon, or roughly half its 3.8 mln shares outstanding, according to the latest data from Thomson Reuters.
After market close on Monday Avalon issued a release saying it was "unaware of any information or events that would warrant the stock activity over the last five days other than the purchases disclosed in the Form 3" filed by MintBroker. It said it was not affiliated with MintBroker.
Avalon also said its Chief Executive Ronald Klingle holds about 67 pct of Avalon's voting power and told the company he has no present plans to divest any of his holdings.
On June 29 MintBroker disclosed a New Concept Energy stake of 1.0 million, or about half the company's shares according to Reuters data. Trading in New Concept spiked ahead of the disclosure and also on July 2, from $1.39 on June 27 to a $12.75 peak on July 2, but then slumped back to $4.11 on July 3, the same day that MintBroker said it sold its holdings.
On July 12 MintBroker disclosed it had increased its stake in Mer Telemanagement by 147,716 shares on July 11 to give it a total stake of 446,911 shares and on the same day it said it sold all 446,911 shares in the company for $3.60. The stock fell 19.8 percent to $2.19 on July 11 and fell another 27.9 percent on July 12 to $1.58, the day of the disclosure.
Before Mer Telemanagement's trading surge, which kicked off with a 145.95 percent gain on July 10 to $2.73, the stock had closed at $1.11 on July 9. Shares in Mer Telemanagement closed down 6.3 percent at $2.08 on Tuesday.
Regarding MintBroker's trading in shares of Avalon, New Concept and Mer Telemanagement Ford said: "It's wildly inappropriate for anyone to suggest this trading activity is in any way improper."
"He (Gentile) was buying and selling shares of these companies on the open market like any other trader trading any other stock," Ford said. (Reporting By Sinéad Carew)